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U.S. offices are half-empty amid pandemic: Study

Brivo CTO Jeff Nielsen joins Yahoo Finance’s Zack Guzman to discuss the state of America’s workforce as employees continue to work from home amid the coronavirus pandemic.

Video Transcript

ZACK GUZMAN: We are about six months into the effects of the pandemic here in the United States, and new data is showing that we are not anywhere close to seeing a resurgence in office traffic. Data from Brivo, a company that provides access control systems for a lot of offices here around the country, shows that a lot of people coming back into the office have not anywhere come close to the levels we saw before the pandemic hit. It's still about half of the office traffic that we're used to seeing here, at least when it comes to normal traditional offices. It's a little bit of a different story for manufacturing and warehouse locations.

But here to discuss that trend with us is the CTO of Brivo, Jeff Nielsen joins us now. And Jeff, thanks so much for taking the time to chat this, because there's a lot of debate right now about whether or not we're going to see a complete return to the idea of everyone going back to the office. We're hearing that when it comes to some of these Wall Street firms right now. But just at 50% six months in, I mean, what does that tell you about where we're at in this return to the office?

JEFF NIELSEN: Yeah, I think there was this initial optimism back in April, May, you know, this is going to be a short-term thing. We'll be back to normal by end of the summer, maybe the end of the year. And what we see in this data certainly is that, you know, no one is rushing to go back to the normal pattern of office usage, certainly in traditional offices like the one I work in.

As you mentioned, we track office usage by access control data. So Brivo is the underlying software and hardware that figures out whether someone's allowed to get in the door or not, whether that's a door at your commercial office building, or a multi-family residence, or anything like that. So our data is based on the number of people, you know, swiping a card or a mobile credential to get into a space.

And as you alluded to, you know, across the country, you know, we're just barely above 50%. We have something on our website called the commercial re-opening index, which looks at the total number of people using any kind of credential to go into an office space, and we have that at 50%-- or 57%-- excuse me-- as of last week. So that's 57% of the, quote unquote, "normal traffic" we were seeing in January and February, and that's our baseline.

ZACK GUZMAN: Yeah, and I mentioned that we did see-- or I guess your data shows a higher uptick in terms of, you know, manufacturing and warehouse locations. But also interesting, your data shows a difference when it comes to regions as well. And obviously, states have been different about their reopening plans here. But talk to me about what you're seeing regionally, as I was kind of surprised to see retail locations in Miami well above that 50% return rate. So talk to me about that.

JEFF NIELSEN: Yeah, absolutely. Absolutely. That's one of the interesting things that stuck out to many of us that looked at this data that for retail workers, that's-- you know, that's the folks that are unlocking and locking the spaces, but that's right at about 90% of where we were in Miami, certainly. If you look at places like Houston and Los Angeles, they also have retail workers at about 75% of the pre-pandemic levels. But that's certainly not true across the board. You know, to pick a counter example, in San Francisco, my son actually works there in the Bay Area, you know, they're down at 75% less than normal capacity, even for retail.

ZACK GUZMAN: Yeah, and retail--

JEFF NIELSEN: So, yeah, definitely.

ZACK GUZMAN: Retail makes sense, too, because, you know, you get to meet customers in the store. I mean, if that's where you do business, you have to do it there. But if you're an office worker and you can, you know, do most of your job from home, as I am currently doing, as we're all doing here at Yahoo Finance, we can do that.

But when we think about what the recovery at this point, six months in, 50% traditional office workers back in the office, what would you predict-- because obviously commercial real estate here is a big question mark and something that a lot of investors are watching when we think about one year, two years down the road. What are you thinking about the recovery here? And do you think that the work-from-home move is going to stay permanent two years down the road?

JEFF NIELSEN: Well, I don't know that I have any special qualifications to speculate on that, but certainly, it's going to be-- for regular office spaces, everything we're seeing says it's going to be very, very slow. I don't know when we'll see the number of people unlocking doors with a physical credential like they were back in January or February. That could be a couple of-- a couple of years off.

People are-- definitely, you know, with the length of time that this thing's been going on are rethinking what needs to be done together, where do-- when do we really need to gather versus when can we do just as fine over a video conference? So I think you will see companies, and we've seen some of this in the headlines, rethinking how much space they need to provide for their employees. You'll see different patterns where instead of five days a week being a normal pattern, maybe two days a week will be more the-- more the norm, or one day a week.

Maybe teams get together once a week. One of my colleagues commented that maybe we're going to switch-- you know, you used to have an off-site meeting when you wanted to get together and get stuff done. Maybe that'll flip and now that'll be the on-site meeting. You know, when we need to get together to put our heads together, we'll have our-- our annual on-site.

ZACK GUZMAN: I have a friend whose corporate retreat was just virtual, and I think a lot of people were disappointed with that. That's already become the normal back to office now here too, so not a lot coming from that. But the data showing an interesting return here, I guess, at 50% six months in.

JEFF NIELSEN: Definitely.

ZACK GUZMAN: Jeff Nielsen, Brivo CTO. Appreciate you joining us.